Caroline Ellison is back on the stand as the prosecution’s key witness in the fraud trial of FTX founder Sam Brankman-Fried.
Ellison, 28, testified Thursday that after finally breaking off her relationship with Bankman-Fried for good in May 2022, she “tried to avoid one-on-one conversations with him.”
Over the next six months, as FTX imploded, Ellison also tried to avoid him in social situations, she told the jury.
She said: ‘I found it difficult to have personal one-on-one conversations with him, so I tried to avoid those and avoid spending a lot of time with him in social situations.’
She told the jury that after FTX filed for bankruptcy in November 2022, four or five FBI agents came to her parents’ home outside Boston, where she lived.
The agents seized a number of computers belonging to her, her mother and her boyfriend, who worked at FTX and Alameda Research, the trading company she ran.
Her confession means that within six months of breaking up with him, she had already left Bankman-Fried – and was in a relationship with someone else she worked with.
Caroline Ellison testified Thursday that after breaking up with Sam Bankman-Fried in May 2022, she “tried to avoid one-on-one conversations with him”
Sam Bankman-Fried dated Caroline Ellison and appointed her head of FTX’s sister company Alameda Research
Ellison said she and Bankman-Fried “sometimes talked outside of work” and because they lived in the same $30 million penthouse, it was “hard to avoid that completely.”
“I continued to have work communications through (messaging app) Signal,” she said, adding that she also continued to participate in group meetings.
Cohen asked if it was “fair to say you didn’t talk outside of work?”
Ellison said she and Bankman-Fried “sometimes talked outside of work” and because they lived in the same apartment, it was “hard to avoid that completely.”
She said: ‘I often shared feelings about my unhappiness with our relationship.
“I also shared feelings about the intersection of personal and professional relationships and how it affected me at work.
‘If I mess something up at work and Sam gives me feedback, it also affects our personal relationship.
‘It gave me a bad feeling. It made me feel like an unequal partner in our relationship.”
The court previously heard that Ellison and Bankman-Fried started sleeping together in 2018 and started dating in the summer of 2020.
Their relationship lasted a year before they broke up but got back together a few months later.
They eventually broke up for good in the summer of 2022, when the extent of FTX’s problems became clear.
Ellison was named co-chief executive at Alameda in 2021 – she and Bankman-Fried were on ‘break’ at the time – and chief executive in 2022.
The court previously heard that Ellison and Bankman-Fried slept together in 2018 and started dating in the summer of 2020.
Ellison returns Thursday to testify against Sam Bankman-Fried
In her testimony, Ellison said she broke up with Bankman-Fried for good because he “didn’t pay attention to me.”
The two did not look at each other in the courtroom, despite sitting a few meters apart.
Testimony revealed that Ellison was paid significantly less than the three other senior men at FTX.
She told the court her base salary was $100,000 and her largest bonus was $20 million.
By comparison, securities filings show that FTX’s chief engineer Nishad Singh received $587 million, co-founder Gary Wang received $246 million and Bankman-Fried received $2.2 billion.
She testified that she then became “very upset.” Bankman-Fried said the financial problems were ‘my fault’.
Ellison described how she and Bankman-Fried had a difficult conversation in the study of his $30 million penthouse apartment in the Bahamas in August 2022.
At that point, it was clear that Alameda had borrowed more than $10 billion from FTX’s customers.
Ellison said Bankman-Fried told her she was “largely responsible for the financial situation at Alameda.”
She said: ‘He spoke quite wildly and forcefully. I became very upset, started crying and had difficulty continuing the conversation.
“(He said) it was my fault that Alameda got into this situation.”
Ellison said she “absolutely could and should have done things differently.”
But she told the jury: “The fundamental reason was that we had borrowed these billions of dollars in loans and used them for illiquid investments.”
Assistant U.S. Attorney Danielle Sassoon asked Ellison, “Whose decision was that?”
Ellison said, “It was Sam’s.”
Sam Bankman-Fried blamed Caroline Ellison for FTX’s collapse in court documents obtained by DailyMail.com. Bankman-Fried claimed the culture at Alameda Research, the FTX sister company that Ellison led, had become “mediocre at best” and said his ex was “not good enough to be trusted” in its liquidation.
Earlier this week, Ellison told the jury that she grew up near Boston and studied mathematics at Stanford University before working as an intern on the stock desk at Jane Street, a trading firm.
She met Bankman-Fried there while he was working as a trader.
He left and in the spring of 2018 she met him for coffee when he told her he had started his own company, Alameda, and offered her a job as a trader.
But shortly after joining the club, she discovered that Alameda was in “much worse shape than I realized.”
She says: ‘Just before I started working there, it suffered major losses. Lenders have raised a lot of money and more than half of the company has indeed closed down.’
Sassoon asked if Bankman-Fried had shared these “rough circumstances” with her before she joined.
She said no. Ellison told the jury: “I asked why he hadn’t shared more of this information and he apologized and said he didn’t know how to tell me.”
Ellison said they were “not really” open about their relationship and that they kept it a “secret” the first time they dated.
The second time Bankman-Fried ‘agreed to make it public’ and they lived together but ‘didn’t talk about it much’
Ellison said she became co-chief executive of Alameda in 2021 – at a time when she and Bankman-Fried were “on hiatus” – and chief executive in 2022.
She told the jury that her salary did not change when she became co-CEO and she stayed on $200,000 a year.
She received bonuses ranging from $100,000 a year to $20 million, her largest, in 2021.
She asked Bankman-Fried for an equity stake in Alameda, but he waved her away, saying it was “too complicated and didn’t make sense.”
She was given a 0.5 percent stake in FTX, which was a fraction of the stake held by Bankman-Fried and his other top lieutenants.
Ellison admitted she was “not particularly” suited to be in charge of Alameda.
She said: ‘I thought it was a big job and I didn’t have much experience. Sam said there wasn’t a better person for the job.”
She told the jury she became concerned when she discovered that Alameda had loaned billions of dollars to Bankman-Fried, FTX co-founder Gary Wang and Nishad Singh, its chief engineer.
Bankman-Fried faces up to 115 years in prison and has denied 13 charges of fraud and money laundering.